Navigating China's perilous health care system along the Street of Eternal Happiness

At a park on the Eastern end of the Street of Eternal Happiness, groups of seniors begin their day with morning exercises. China's seniors do what they can to avoid China's overburdened and underfunded healthcare system. - Rob Schmitz/Marketplace

It’s six o’clock in the morning. The sun rises over a park at the eastern end of the Street of Eternal Happiness. The only signs of life are singing birds.

And dancing seniors.

It’s a ritual repeated at parks throughout China every morning: Line after elderly line, proceeding through the motions of morning exercises in unison. Sixty-three-year-old Tu Dongxiu is off to the side of the group, dancing on her own. "Once I begin to dance, I put all my troubles behind me," Tu says with a chuckle. "I don’t have high blood pressure, diabetes, nothing. If I keep dancing, I won’t ever have to see a doctor!"

And that’s part of the reason so many seniors like Tu return here every morning. If they don’t, at some point they’ll end up five miles due West, where the Street of Eternal Happiness ends, at Shanghai's Huashan Hospital. The only dancing here in the hospital's arena-sized lobby is the side-step shuffle around thousands of patients, waiting to see a doctor.

Patients like Yao Jinlian, who arrived here at five this morning from the countryside. It’s now noon, and she’s still waiting. "My limbs hurt, and I get migraines. Sometimes I can’t even walk," says Yao. "I’ve spent more than 10,000 dollars out of my own pocket for dozens of visits to the neurologist over the past two years."

Like nearly all Chinese, Yao is covered by a state health insurance plan. But she’s discovered that it doesn’t pay for much of her treatment. Yao and her husband Tang Jin Lin say that after two years in and out of hospitals, her doctors still don’t know what’s wrong with her.

"It’s useless!" yells Tang, "They’re just trying to check her quickly, prescribe some drugs, and move on to the next patient. They’re not trying to figure out what’s really wrong with her," he says. Yao interrupts her husband: "We’ve gone through all of our retirement savings seeing these doctors."

Yao has come face-to-face with one of the biggest challenges of China’s healthcare system. Public hospitals in China don’t receive enough funding from the government, so doctors are forced to look elsewhere for money.

Gordon Liu is the director of Peking University’s China Center for Health Economic Research and says Chinese doctors commonly supplement their incomes by prescribing drugs many patients don’t need.

"The reason that many doctors are partially paid through kickbacks and under-the-table payment is mainly because the doctors are positioned as government officers, so their salaries have not been increased comparably," says Liu.

Liu says a typical doctor at a Chinese hospital makes less than a thousand U.S. dollars a month. Receiving kickbacks for drug sales can increase their salaries exponentially. The practice is so widespread that it’s coined the popular Chinese phrase Yi Yao Yang Yi: Feeding hospitals by selling drugs.

But there are other ways Chinese doctors make extra money. Retired Communist Party official Cui Ji and his wife slowly walk out of Huashan hospital onto the Street of Eternal Happiness. The 87-year-old Cui says it bothers him that doctors also expect traditional Chinese red envelopes stuffed with cash before they perform an operation.

"Bribes like this are common. It makes us feel scared for our lives if we don’t give the doctor a red envelope before surgery," says Cui. "Saving lives and curing diseases is a doctor’s duty, not taking bribes. There’s no way I’d ever give a bribe to these doctors."

As Cui says this, his wife, Lang Wenjin, chuckles. She has news for him.

"He doesn’t know this, but last time he got an operation, our daughter slipped the doctor a red envelope right before his surgery," she says, giggling.

It’s a type of corruption even the unwilling have a hard time escaping. That’s why many seniors opt out of China’s health care system altogether by exercising religiously, like a group back on the opposite end of the Street of Eternal Happiness.

Xu Chengyin spends his morning at the park spinning a Diabolo -- also known as a Chinese Yo-Yo -- balancing it on a string held by two sticks. The 65-year-old was diagnosed with diabetes 10 years ago, he’s run out of money to pay the medical bills, so he comes here each day to try and stay as healthy as he can.

"All of us here must exercise. We simply can’t afford a hospital visit. Our retirement salaries are just a few hundred dollars a month. Once you get ill, you’re finished," says Xu.

Rather than counting his days left, says Xu, he’d rather be here, counting along with the morning exercise routine alongside dozens of others on the Street of Eternal Happiness.

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Rob has won several awards for his reporting on China, including two national Edward R. Murrow awards and an Education Writers Association award. His work was also a finalist for the 2012 Investigative...